Top Challenges in ERP Integration and How to Overcome Them

Enterprise Resource Planning (ERP) integration can transform the way a business functions by unifying data, automating processes, and providing real-time visibility of business activities. However, integration projects are often anything but straightforward, as it requires unifying many disparate and sometimes legacy systems; coordinating cross-functionally; and transferring data securely, as data moves between the legacy and cloud environments, through mobile technology, and other third-party applications. Therefore, if an organization doesn’t sufficiently prepare for the ERP integration project, it can expect delays, increased costs, and service interruptions.

This white paper will identify the main challenges to an organization’s successful ERP integration project, as well as provide an overview of effective approaches to overcome these obstacles to ensure that organizations have a highly effective, scalable, and flexible technology environment in the future.

1. System Compatibility Issues

 What is the challenge:

The majority of organizations operate multiple systems, including but not limited to the following: CRM, eCommerce, HRM, POS, accounting, IoT, legacy systems, and/or databases. Each of these systems may:

• be using completely disparate data structures
• be based on completely different standards
• or have completely different ways of integrating with each other.

Solutions to the challenges:

• Select ERP-compatible applications whenever feasible.
• Leverage middleware technologies (i.e., Dell Boomi, MuleSoft, Custom APIs).
• Develop data transformation logic to convert unsupported data formats to an ERP-supported schema.

Note: Middleware can be beneficial because it allows users to connect to multiple systems (either directly or indirectly) without having to find a connection between each of those systems.

2. Poor-Quality/Inconsistent Data

Integration projects reveal a more extensive issue than just the technical side; they present an opportunity to resolve the issues associated with inconsistent data within a company.

The Issues Associated with this Challenge:

• Duplicate customer records – having multiple entries for one customer.
• Inventory counts are inaccurate – having counts of stock that are incorrect.
• Missing Pricing, SKU, and/or Supplier Data – information that should be available to make informed business decisions about inventory and how to price items.
• Misaligned departmental Reports – having different departments report based upon different versions of the same dataset.

The Opportunities Associated with this Challenge:

• Complete a complete data audit prior to the execution of integration projects.
• Implement data quality/cleansing tools.
• Establish standardized values – (for dates, currencies, identifiers, etc.)
• Establish and Enforce a Single Source of Truth (SSOT) strategy.

Utilize available tools such as talend, Informatica, Power BI Data Prep, and the creation of Python scripts for structured data validation.

3. Lack of Clear Strategies for Integration

The failure of many ERP projects is due to the fact that companies begin the integration process without:

• Clear objectives.
• Measurable success Criteria – (KP’s).
• Developed architecture plans.
• A phased rollout of their integration project.

The Opportunity Associated with This Challenge:

Develop a Strategy. Develop a Strategy Based upon:

• Business Objectives – Automation, real-time synchronization, etc.
• Architectural Integration Methodology – ETL, API, Middleware, Microservices, etc.
• Data Governance Methodology.
• KPI Tracking Methodology.
• Roll-Out the Strategy in Incremental Phases Instead of Full “Big Bang.”

4. Costly Integration and Budget Overruns

 Challenge:

Reasons why ERP integration typically has high costs are:

• Long timelines
• Customization
• Large technical teams
• Unplanned patched bug fixes
• Reliance on external consultants

Solution:

To create a reusable structure for ERP integration, utilize cross-platform frameworks, such as REST APIs and GraphQL. Develop internal capability early (this will decrease reliance on consultants). If appropriate, utilize low-code iPaaS platforms. Use Continuous Integration/Continuous Deployment (CI/CD) pipelines for the automated testing of integrations.

Pro Tip: By factoring in maintenance and scalability planning at the outset of the integration project, you can save significantly on the cost of integrating ERP to other systems.

5. Security Risks and Compliance Issues

Challenge:

ERP systems include the company’s “crown jewels”, including customer PII, employee records, supplier contracts, financial information, pricing models, etc. Thus, integration also presents the risk of:

• Unauthorized access to data
• Data transfer vulnerabilities
• Compliance issues

Solution:

To secure integration, you should use encrypted communications (TLS 1.3, HTTPS) and implement Role-Based Access Control (RBAC). When utilizing applications that utilize APIs for integration, you should deploy an API Gateway for authentication purposes (OAuth, JWT, and Single Sign-On) and conduct regular penetration tests. You should maintain an audit trail of any integrations.

6. ERP Downtime and Workflow Disruptions

Challenge:

The process of connecting live business systems to an ERP can potentially disrupt:

• Operational Workflows
• Order Processing
• Departmental Reporting
• Manufacturing Schedules
• Customer Service Response Cycles

Solution:

Conduct comprehensive testing of integration in a staging environment. Use blue-green deployments to prevent downtime during integration. Send integrations out in micro-batches. Use automated methods to deploy integrations.

7. Lack of Internal IT Technical Skills

Challenge

To integrate ERP you require technical depth in the areas of:

• Database management
• API consumption and creation
• Data normalization
• Endpoint security
• System orchestration
• Error flow handling

Many companies underestimate the level of technical skills required.

Solution

• Train internal personnel early in the process
• Have a detailed API specification available for reference
• Implement monitoring dashboards that can facilitate easy debugging
• Adopt low-complexity frameworks to support repetitive modules
• Create internal champions for integration to facilitate incremental progress over time

8. Restrictions Imposed By Third Party Suppliers

Challenge

Certain suppliers:

• Restrict access to the database
• Charge additional fees for API use
• Are not backwards compatible
• Do not provide real-time webhooks

Solution

• Negotiate during onboarding for API access
• Use webhooks or polling layering where live push data is not available
• Temporarily cache data locally to maintain workflow continuity
• Maintain logs of ERP to Vendor synchronization

9. Scalability Limitations After Integration

Challenge

An ERP integration that works today could fail tomorrow when:

• Dealing with a higher volume of transaction processing
• Increasing real-time automation through expansion
• Adding additional geographic regions to the business
• Providing more microservices or modular business administration systems
• Providing mobile workers with the ability to access the data they need

Solution

• Design API Endpoints that can Be Scaled as Needed
• Use Event-Driven Archiving
• Utilize Fast Caching Layering for Intermediate Data Packets
• Establish Global CDNs for Business ERP Models
• Utilize Queued Systems (Kafka, RabbitMQ) to Manage Large Data Sets for Synchronization

10. Managing Change in the Workforce

Challenge:

Integration of ERP has resulted in many changes to the way people work. Many team members will resist using a new system due to:

• Fear of the unknown and changes that will occur in their workflow
• Lack of training to adequately prepare for using the new system
• Complexity of the new User Interface (UI) and reporting systems’
• Conflicting expectations from one department to another on what type of information each department expects from ERP’s database, etc…

Solution:

• Conduct Departmental-Level Workshops for User Group Members
• Provide hands-on Training
• Deploy UI/Layers in a manner similar to how end-users are familiar with existing workflows
• Communicate benefits of integration with empirical data (e.g., Save Time, Automate, Reduce Errors)
• Provide Executive-Level Sponsorship to Help Build Employee Confidence

Additionally

Integrating ERP represents a major evolution in any business; therefore, it presents the greatest challenge to many businesses as well as provides the greatest opportunity. Unfortunately, challenges like compatibility, data inconsistency, security risk, high cost, and not having a scalable architecture often impede the successful completion of ERP integration projects; however, these challenges may be overcome with proactive and strategic troubleshooting.

By taking advantage of middleware connectors, API’s, regular Data Auditing, layered security, Phased Rollouts, and developing Internal Trainers who can teach other employees how to use the new ERP system, organizations can overcome all roadblocks to the successful completion of their Integration Efforts and enable their employees to utilize the full potential of the Unified ERP Environment.

An Integrated ERP Environment is not simply a connection between two or more platforms; it represents a connection point between the entire organization, creating an Intelligent, Automated, Scalable, and Googled Experience for all Employees.